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Film Industry Contribution To UK GDP Up 39% In 2006

The UK film industry contributed £4.3 billion to UK GDP in 2006, up from £3.1 billion in 2004, a 39% increase in two years according to an independent report by Oxford Economics.
This figure takes account of the widespread contribution made by the UK film industry to the economy including revenues made through employment, production and servicing through to profits from worldwide exploitation, exports, merchandising and UK tourism.
The UK film industry has grown significantly – from an average of 43 films per year made in the 1980s to 120 a year since 2000.
The report also confirms that the Government’s new film tax relief is working well, keeping the UK competitive and supporting the growth of a thriving film sector.
As a result, the UK is expected to attract around 11% of global film production over the period to 2010 with inward investment rising to about £800 million by 2010.
John Woodward, Chief Executive Officer of the UK Film Council said:
“This new report shows that the UK film industry is a major contributor to the UK economy making films that UK and international audiences want to see and generating financial and cultural benefits. Thanks to our world class film facilities and phenomenal skills and talent, backed by Government and industry investment, the British film industry is strong and primed for further growth.”
The report – The Economic Impact of the UK film Industry – finds that film contributes to ‘UK plc’ in a number of ways including:
  • Employment - the UK film industry employs 33,500 people directly (similar to book publishing and IT hardware) and supports 95,000 jobs in total. Employment has risen steadily since the mid-1990s with a 70% increase in production sector jobs since 1996 creating an extra 7,700 full-time jobs.
  • Tourism - films depicting the UK are responsible for attracting about 1 in 10 overseas tourists, spending around £1.8 billion a year. This is estimated to be worth around £900 million to UK GDP.
  • Environment – the film industry is one of the UK’s most carbon-friendly sectors. Its emissions per £1,000 of GDP contribution are estimated to be only half those of the economy as a whole.
  • Investment – capital investment in the UK film industry is estimated to have been £120 million in 2006. Since 2000, fixed capital investment in infrastructure and new technology has totalled around £635 million.
  • Exports – total exports of the film industry were £967 million in 2005, with a net contribution of £163 million to UK balance of payments.
  • Merchandising associated with UK films is thought to have supported about 6,500 jobs in 2006 with a £235 million contribution to GDP.
  • Multiplier effect - for every 10 jobs directly supported by the UK film industry another 10 are supported indirectly in the supply chain.
  • Culturally British films are important to UK audiences. A film shown in the UK can expect its box office to be up to 30% higher if it is indigenous. UK films boosted box office revenues by more than £50 million a year over the last decade.
The film industry also benefits other creative industries for instance through R&D which drives technological innovation. For example, the investment made by visual effects company Framestore CFC in new CGI technology for the Harry Potter films was subsequently used by the BBC on 'Walking with Dinosaurs'.
Ivan Dunleavy, Chief Executive of Pinewood Shepperton plc said: "The UK is increasingly seen as a creative hub and one of the few worldwide centres of excellence.
"This position will be strengthened over the coming years given its commitment to training, innovation, capital investment and infrastructure. The Oxford Economics report demonstrates clear and irrefutable evidence of the tangible benefits that UK film and the creative industries as a whole bring to the economy."

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